Crisis forces a halt to jeepney production

Crisis forces a halt to jeepney production

MANILA, Philippines (AP): Rising costs have forced the Philippines' pioneer "jeepney" maker to halt production after 44 years, threatening the gaudily decorated vehicles' dominance of the country's potholed roads.

The jeepney, created from surplus U.S. Army jeeps after World War II, became a symbol of Filipino ingenuity and can-do attitude.

But its pioneer maker, Sarao Motors Inc., was unable to overcome the economic difficulties of the 1990s and shut down production on Monday, laying off 250 workers, company Vice President Edgardo Sarao said.

Sarao's father, Leonardo Sarao, and his uncles started building jeepneys from surplus American jeeps after the war in a rented garage.

They extended the bodies, built steel roofs, installed parallel benches and opened the backs for easy access for passengers. As they received more and more orders, the business grew, prompting the elder Sarao and his brothers to establish the company in 1956.

The first vehicles carried six people in the back and two beside the driver in front. The passenger capacity grew over the years, but the basic design remained.

For decoration, drivers mounted chromed horses on the hood as a reminder of an earlier period when horse-drawn carriages dominated Philippine streets. Later additions included rows of decorative side mirrors, dozens of lights, powerful stereos and a line of decorative whip antennas.

But critics say Sarao and dozens of smaller jeepney makers failed to improve their designs or technology to keep up with modern vehicles. In recent years jeepneys have faced increased competition from Japanese-made air conditioned vans that also ply the country's roads.

Sarao said high production costs, low sales, rising wages and fewer licenses given by the government for jeepney operators forced the company to first decrease production from a peak of 18 vehicles a day in the mid-1980s to just three a day for a three- day work week this year.

He said the falling Philippine peso has doubled the price of secondhand engines, transmissions and steering wheels imported from Japan. No longer made from jeeps, current jeepneys are based on parts from Japanese secondhand trucks.

A standard 18-passenger Sarao jeepney now sells for 316,000 pesos ($6,800) while a deluxe stainless steel version costs about 390,000 ($ 8,400).

"We have been hit hard this past year, we could not bear it anymore," Sarao said. "It's painful for some of the workers. Many have grown white hair with us and probably could not find work elsewhere."